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This study demonstrates the impact of consumptive and productive financing on ROA and ROE in multifinance companies, suggesting regulatory needs for better risk management practices.
This study examines the interplay between consumptive and productive financing in multifinance companies. The results reveal that both financing types enhance ROA and ROE, with productive financing offering higher returns but greater risks—as indicated by elevated Conditional Value at Risk (CVaR) levels—compared to consumptive financing. Johansen cointegration tests confirm stable long-term equilibria among key financial indicators. Utilizing Modern Portfolio Theory (MPT), this study demonstrates that strategic diversification can optimize risk-adjusted returns. The results support regulatory mandates for a minimum productive financing allocation and highlight the necessity of robust risk management practices to sustain financial resilience in volatile economic conditions.
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Santoso et al. (2025) studied this question.
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